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Open the doors to the highly skilled

In his State of the Union address this week, President Barack Obama called for reforms that would allow more highly skilled foreign-born workers, particularly engineers and entrepreneurs, to work in the US.

The demand for highly skilled foreigners far outstrips supply, and this demand isn’t just coming from Silicon Valley. As a Financial Times article recently discussed, America’s heartland is in dire need of highly skilled workers in “Stem” (science, technology, engineering, and math) fields. Manufacturing companies such as Caterpillar and Cummins, both with headquarters in the Midwest, would like to hire more engineers and technologists but are restricted by current immigration laws.

The number of H-1B visas, or temporary work visas given to skilled immigrants, is capped at 65,000 a year, and an additional 20,000 are available for immigrants with advanced degrees in Stem fields. H-1B visas are valid for up to six years. If companies want their foreign workers to stay longer, they have to file a request for permanent residency on their behalf. One problem is that skilled workers from big countries such as China and India typically hit the country limit on employment-based green cards issued each year quite easily. As a result, waiting for a green card could take years or even decades.

Congress is working on a draft bill to ease these limits, which would make it easier for foreign students who graduate with a master's or PhD in a Stem field from a US university to get green cards. But while the benefits to the companies who employ highly skilled workers are clear, will a policy that allows more highly educated foreign workers to immigrate to the US benefit the average American?

Of the economists surveyed in the Initiative on Global Markets Economic Experts Panel, a weekly poll of economists’ views on public policy, almost 90 percent agreed that the average American would be better off if a larger number of highly educated foreign workers were legally allowed to immigrate to the US each year.

More access to high-tech workers increases companies’ productivity, thus lowering costs and making goods and services more affordable for consumers. Highly educated foreigners also tend to be creative, inventive, and entrepreneurial, discovering new ideas that lead to new businesses, more jobs, and better products.

A study cited by one of the experts in the IGM panel finds that immigrants who first entered the US on a student/trainee visa (the F-1 or J-1) or temporary work visa were more successful than Americans with a similar education in obtaining patents and eventually commercializing and licensing those patents. Immigrants also were more likely to start companies based on their advanced technical knowledge.

An influx of foreign scientists and engineers can increase the productivity of the average worker, but would it make highly skilled natives worse off because of competition? It’s probably true that having more foreign PhDs decreases the salaries of American PhDs. But in academia, for example, Harvard University Professor Greg Mankiw argued in a recent New York Times column that higher education in the US has greatly benefited from a global approach to recruiting faculty.

As a result, America’s students can learn from the world’s best minds. A premier faculty attracts the world’s brightest students to come to the US to earn their PhDs, the best of whom hopefully will stay and apply their skills.